First Time Home Buyer

Homeownership is a dream for many families, however many people are often overwhelmed by the entire process. Others are uncertain if they are ready to transition from renting to buying. Family Home Funding Corp is here to help guide you through this important time in your life and to help make owning a home a reality.

Before you start to apply for loans, you first need to be sure you ready to make that transition from renting to buying. If you are ready to settle down in one place for a while, have a stable job, reliable income, and manageable debts, buying a home may be the right choice for you. If you have doubts about any of these things, we will answer any questions you may have so that you know you are making the best decision.

Once you have decided that you are ready to purchase a home, one of the first things you will want to do is review your budget to determine how much house you can afford. A general rule of thumb is that your housing payment should not exceed 28 percent of your income. This is what is referred to as the housing, or front-end ratio. This monthly housing payment is comprised of not only principle, but interest, taxes, and insurance as well. As this ratio is just a rule of thumb, affordability will vary depending on each individual’s unique situation.

Preparation is vital to keeping your monthly payment low or allowing you to afford a nicer home. Maximizing your credit score can allow you to score a lower interest rate which can save you significant amounts of money throughout the life of the loan. Saving to make a larger down payment and to pay for closing costs up-front can also help to lower your monthly payment and can allow you to avoid Private Mortgage Insurance (PMI).

If you have prepared thoroughly and are confident you are ready to purchase your first home, it is time to look into pre-qualification and pre-approval. Pre-qualification is a less formal process than pre-approval and involves analyzing your debt, income, and assets to give a general idea of what you may be able to afford. Be sure to keep in mind that pre-qualification is not a guarantee that you will be able to obtain a mortgage of that amount.

Pre-approval is a much more detailed process in which you will complete a formal application and provide documentation such as pay stubs, W-2 forms, bank statements, and credit and debt information. After this information has been reviewed, you will be provided with a commitment for an exact loan amount and the search for your home can begin!

The true advantage of a pre-approval lies in the negotiating power that it offers. A seller is much more likely to accept an offer from someone who has been pre-approved than someone who has not. Sellers can be wary of a buyer who has not been pre-approved as this creates uncertainty and doubt in their minds. Pre-approval can also speed up the buying process once you have found the home you intend to purchase. Your financial standing and credit have already been reviewed. Sellers can be more inclined to accept an offer knowing there will be no delays.

Once a seller has accepted your offer, it is time to close. At closing, all parties get together to sign documents and you will be just about ready to move into your new home! Family Home Funding Corp wants to make the dream of homeownership a reality for families throughout New Jersey. If there are any questions you have about purchasing your first home, contact us today and one of our experts will be glad to help!

Although we are located in Kinnelon, New Jersey, we do business throughout the entire state of New Jersey, including surrounding areas such as Butler NJ, Wayne NJ, Paterson NJ, Haledon NJ, Garfield NJ. We also are licensed and work in the state of Florida.